Greens lay down law to Labor on safeguard bill – no new coal or gas, or no support

The Australian Greens have laid down the gauntlet on federal Labor’s safeguard mechanism reforms, putting forward a formal offer in support of the proposed legislation, but only if it is tweaked to prevent new coal and gas projects.

Citing the federal government’s own emissions projections, the Greens said on Tuesday that the party could not support legislation of a mechanism that would accommodate major new gas projects, and allow actual pollution from gas to rise.

Greens leader Adam Bandt says that while his party still has “huge concerns” with other parts of scheme, including “rampant” use of offsets and setting of weak targets, it is willing to work through these if Labor agrees to its “one amendment.”

Essentially, Bandt is challenging the Albanese government – having won the 2022 May election on a platform of strong and credible climate action – to once and for all nail its colours to the mast on fossil fuels.

“Labor needs the Greens to get this through Parliament,” Bandt said in a statement.

“If Labor’s scheme falls over, it will be because Labor wants to open new coal and gas mines. Labor has to decide how much it wants new coal and gas mines.”

How this ultimatum is received remains to be seen, but the government’s repeatedly assertions that preventing new coal and gas projects from going ahead is not in the remit of the safeguard mechanism should offer a clue.

“It’s not designed to do that. It is designed that all facilities, whether they be old or new, are reducing their emissions,” Bowen told ABC TVs Insiders program last year.

As things stand under the proposed reforms, any new projects projected to emit more than 100,000 tonnes a year will be covered by the mechanism.

But Labor needs the support of the Greens and at least two independent senators to pass the legislation into law by March 31, with the Coalition indicating it will not support the bid.

The proposed package of reforms to Australia’s mandatory decarbonisation framework is considered by some to be the most important climate policy the government will release this term.

In its current form, the safeguard mechanism, has been criticised for failing to incentivise big emitters to clean up their act, thanks to high baselines.

Labor’s changes propose to reset baselines for existing Safeguard Mechanism facilities to remove this headroom and drive immediate emissions reductions, by nearly 5% a year out to 2030.

On the flip side, Labor is also proposing a number of mechanisms to provide compliance support and flexibility, including a new form of tradeable credit known as Safeguard Mechanism Credits.

SMCs will be issued for facilities that reduce their operational emissions below their baseline and can be surrendered for the purpose of meeting baseline targets – including in trades with other entities that are falling short.

For the Greens, SMCs had been filed under “rampant use of offsets” as one of the scheme’s many down sides. Bandt has described them as “pollution permission slips.”

“Buying offsets is just coins down the back of the couch for [heavy polluters],” said the Greens’ Maureen Faruqi in January when Labor’s proposed reforms were first tabled.

“Coal and gas can’t be allowed to just buy their way out of real pollution cuts with dodgy offsetting.”

But RepuTex managing director Hugh Grossman last week warned that lobbying against the use of SMCs could lead to the wider use of Australian Carbon Credit Unit (ACCUs) because industries wouldn’t be rewarded for lowering their on-site emissions.

“It’s an ironic twist for the Greens,” Grossman said. “If you remove [SMCs] there will be less incentive for industry to reduce emissions.”

Carbon Market Institute chief John Connor has similarly warned that blowing up an initiative that is important but not yet sufficient “is a judgment call haunted by the ghosts of not too-distant history.”

For the Greens, the debate now boils down to just one central question: should we allow new fossil fuel projects to be developed during a global climate crisis?

“The Greens will back Labor’s scheme if Labor agrees to stop opening new coal and gas mines,” Bandt says, pointing to “at least seven” new gas projects like Betaloo and Scarborough that will go ahead under the mechanism as it stands.

“[This] will make the climate crisis worse and actual pollution will go up from new coal and gas projects opening,” adds Bandt.

“You can’t put the fire out while pouring petrol on it.”